Survival tactics

Despite
criticism, Investors in People is now 10 years old and is launching a fresh
batch of standards.Lucie Carrington
reports

Fresh
from celebrating its first decade of delivering the national training standard
to employers, Investors in People UK (IIP) is busy planning the next 10 years.
Partly it will be more of the same – persuading large employers to become
Investors in People, but IIP will also target smaller firms (SMEs) and it will
continue forging international links.

In
addition it is embarking on what could turn out to be a massive flanking
operation, producing a range of additional products that will function alongside
the core investors’ standard. A recruitment standard, or model as IIP prefers
to call it, was launched last year and this year the organisation will begin
work on a leadership model and a work/life balance model.

IIP
UK currently boasts 25,000 accredited companies with one in four workers
employed by organisations with Investors In People status. But what’s amazing
to training experts and policy watchers is that IIP as a scheme and an
organisation has survived so long, when other training policies have come and
gone. It has even survived the current government’s massive overhaul of
training policy: the scrapping of training and enterprise councils,
rationalisation of national training organisations and the restructuring of
what remained of the old employment department.

Its
survival is largely due to the fact that it commands cross-party and
industry-wide support. Launched by the Conservative government in 1991 with
support from the CBI and the TUC – backing both organisations reaffirmed at
IIP’s birthday bash last year – it was no surprise, therefore, that Labour hung
on to it.

‘We’ve
had five secretaries of state since this initiative was launched, not to
mention departmental reorganisations, but the ministerial support for IIP has
been fantastic," says CEO Ruth Spellman.

IIP
has also succeeded because it has managed to adapt while insisting that its
basic principles remain the same. Early on it became bogged down in the
bureaucracy and paperwork that have come close to crippling so many national
training initiatives, such as the national vocational qualifications. But IIP
UK realised that it could not be too prescriptive about the way employers
adhered to its principles, and the result is a fairly simple system involving
its four principles [see box], a dozen indicators and about 25 types of
evidence for an assessor to look at, which emphasise what firms do rather than
the processes they use.

As
Jane Pike, HR director at tea room and coffee specialistgroup Bettys and Taylors points out:
"Over the years, IIP has come to accept that businesses do things
differently." And it has been essential to its survival. ‘When we embarked
on achieving Investors in People status we believed we were doing some good
things. We didn’t want to change just for the sake of getting an award. If the
scheme had continued to become more bureaucratic, then we would have moved away
from it,’ Pike says.

Spellman
must take some of the credit for IIP’s survival. Formerly a management
consultant, she is an articulate and insatiable publicist for the scheme, and
is wholly focused on the message. She never lets an opportunity slip by to tell
business, government, the media and whoever will listen that investing in
people improves business productivity and impact on profits. She is backed up
by chairman Tim Melville-Ross. As a former head of the Nationwide Building
Society and the Institute of Directors, Melville-Ross adds a bit of gravitas to
the consultancy glitz.

However,
the problem for Spellman and Melville-Ross is that it is virtually impossible
to prove how much value the scheme really adds to an organisation. There is a
growing body of research that makes a link between training and productivity,
including IIP’s own research last year, which found that four out of five
employers felt that having the right skills and a good training programme were
essential to business productivity.

Like
motherhood, apple pie and so many personnel policies, it’s hard to disagree
with this sort of common sense. But it does not prove a link between training
and productivity nor does it prove that the scheme itself delivers productivity
improvements.

The
Institute of Directors (IoD), which represents owners and managers in many of
the small firms that IIP wants to target, does not think that the case for the
scheme as a business improvement tool is proven. It also carried out some
research last year and found that while nine out of 10 of its members said IIP
had improved employee’s ability to do their jobs, only one in four said it had
improved productivity and less than one in seven said it had affected
profitability.

"It’s
a good initiative, but IIP shouldn’t exaggerate its potential," says
business policy executive at the IoD Richard Wilson. Nor does he think that IIP
is right to target small firms. It is, he says, an unrealistic goal for many
small firms. "Given that a lot of small businesses don’t survive for more
than three years, the scheme is not necessarily the best way forward for
them," he says.

Nonetheless,
the scheme has plenty of supporters. Jane Pike of Betty’s and Taylors, for
example, is convinced that it has had a good impact on customer satisfaction
scores, while Peter Holmes, group director of marketing with car maintenance
firm Kwik Fit, says it has improved staff turnover by up to 35 per cent in some
areas.

Kwik
Fit is an established Investor in People having first achieved the standard in
1993. "The key to our success as a business is down to our skills and our
service to the customer," Holmes says. "The scheme has provided us
with a logical framework for ensuring that we have the processes in place for
training and measuring the effectiveness of our training.’

With
a customer retention rate of 93 per cent, the scheme is clearly popular among
existing accredited organisations. Listen to supporters like Holmes, Pike, the
CBI, and even the IoD, and it is clear that the real value to employers who
believe in developing their workforces, is that the scheme provides them with a
structure to ensure that training and development is linked to business needs.
It enables senior managers to monitor training teams and check they are not
just doing a good job, but doing the right one.

This
is what Tim Melville-Ross himself found when the IoD was working towards
accreditation. "It made me look in detail at our training plan. There were
all sorts of computer courses on offer to IoD staff that were of no use to the
business," he says. They didn’t last.

The
scheme has also proved a fabulous way of keeping personnel and training issues
on the business agenda, as to gain Investors in People Status an organisation
must have senior management commitment. This means, as Pick points out,
"that the scheme comes up at every board meeting because in some way or
other one of the four principles will be up for discussion".

Like
any government-sponsored body, IIP is only as good as its funding and Spellman
and Melville-Ross have seen enough non-departmental public bodies come and go
to understand the precarious nature of being part of the government training
network. However, while the standard does seem to have put down some roots,
it’s not clear whether it requires a separate organisation to deliver it. Why
not hand it over the Learning Skills Councils (LSC)?

‘We
are here to develop the standard and to preserve its quality and that will
always require a separate organisation,’ Melville Ross insists.

There
is also the question of driving it forward, not just in terms of the number of
employers who can pin an Investors in People certificate on the wall, but also
in driving up the quality of training and people development in the UK.

To
this end IIP is pushing ahead with plans that could secure its future. It has
its international programme, which now has seven licensed partners around the
world including Australia, New Zealand and the Netherlands, and has another14
international pilot schemes running.

More
importantly it has embarked on a new range of products for existing investors
to use to demonstrate their commitment to the workforce. The recruitment model,
which came out last year, was the first, and the leadership and work/life
balance models are in development. IIP is also drawing on the expertise of
others, such as the careers experts Penna, Sanders and Sydney, the Institute of
Management and the CBI, to draw up these additional standards.

Spellman
insists IIP’s expansion plans are what client organisations want. "They
have come to us, we haven’t gone to them," she says. "They respect
the standard and have asked us to design other management tools that tie in.’

The
additional standards will be voluntary but will only be open to firms that have
already achieved IIP status. ‘This is not a gold standard because we think IIP
already offers a gold standard. But we have to provide a new challenge for
organisations that have been accredited for several years," Spellman says.

The
next few years could be something of a challenge to IIP and are likely to be
the real test of its endurance. However, Melville Ross is bullish about the
future. "It would be idle to deny that we aren’t worried about a slower
economy," he says. "But IIP was introduced during the depths of
recession and a large number of organisations used it to survive the 1990s. So
it could help firms through the current economic downturn."

Investors
in People: the four principles:

–
Commitment – an Investor in People is committed to developing its people to
achieve its aims and objectives

–
Planning – an Investor in People is clear about its aims and its objectives and
what its people need to do to achieve them

–
Action – an Investor in People develops its people effectively to improve its
performance

–
Evaluation – an Investor in People understands the impact of its investment in
people on its performance

Case
study
Betty’s and Taylor’s

Betty’s
and Taylor’s, the upmarket teashop chain and tea and coffee retailer, was one
of the first firms to achieve IIP status. "We received the award in 1991
and have been reaccredited every three years since," says HR director Jane
Pike.

Pike
is convinced of the business benefits of the scheme. ‘Over a period of time we
have seen a significant increase in sales and decrease in customer
complaints," she says. ‘We have also seen a marginal, but significant,
decrease in staff turnover in a difficult market – 65 per cent of our staff
have now been with us for more than two years.’

Betty’s
and Taylor’s isn’t just selling tea and cakes – a trip to Betty’s is an
experience. "What’s important to us is the quality of that experience and
that can only be achieved through our staff and teams," Pike says.

IIP
accreditation has enabled Pike and her colleagues to reinforce that across the
organisation. ‘What the scheme has enabled us to do is embed these processes
formally in the organisational culture," Pike says. "It’s easy to get
carried away with the rhetoric of HR and the latest fads, but at the end of the
day the most important issues are those surrounding the Investors in People
principles.’

This
is not rocket science; the processes Pike is talking about are regular monthly
briefings, quarterly appraisals and regular brainstorming sessions involving
all staff.

What
IIP has done, therefore, is provide what Pike calls a "simplistic but
flexible and robust framework" to enable Betty’s and Taylor’s to do these
things in its own way.

The
firm has also introduced an internal IIP-style training award. "All the
branches in Bettys and Taylors are judged against certain criteria such as
training that’s been achieved and added value of that training," Pike
says. "We measure it in terms of things like absence rates, turnover and
customer satisfaction scores.’

The
Investors in People scheme has not brought about a revolution in the way the
catering firm manages its people, but Pike insists the formality it offers and
the involvement of all staff, from the chairman to the cleaner, is important.
"In my experience, the more a commitment is made public the more likely it
is that it is going to stick," she says.

And
it has become a working tool for all staff. "The scheme isn’t owned by HR
or management but by every single employee. It demonstrates their achievements
and there is a considerable element of pride attached to it."